Political Economy of Commuting Subsidies

Wrede, Matthias; Borck, Rainald

doi:10.2139/ssrn.632142

Download This Paper

Open PDF in Browser

Add Paper to My Library

Political Economy of Commuting Subsidies

30 Pages Posted: 9 Dec 2004

See all articles by Matthias Wrede

Matthias Wrede

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - Institute of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Rainald Borck

Humboldt University of Berlin - Faculty of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: November 2004

Abstract

We study the political economy of commuting subsidies in a model of a mono-centric city with two income classes. Depending on housing demand and transport costs, either the rich or the poor live in the central city and the other group in the suburbs. Commuting subsidies increase the net income of those with long commutes or high transport costs. They also affect land rents and therefore the income of landowners. The paper studies how the locational pattern of the two income classes and the incidence of landownership affects the support for commuting subsidies.

Keywords: commuting subsidies, voting, monocentric city

JEL Classification: R14, R48

Suggested Citation: Suggested Citation

Wrede, Matthias and Borck, Rainald, Political Economy of Commuting Subsidies (November 2004). Available at SSRN: https://ssrn.com/abstract=632142 or http://dx.doi.org/10.2139/ssrn.632142